White Paper on Performance Management Part Three

By Natalie Burns
|
24 November, 2014

White Paper on Performance Management Part Three

By Natalie Burns
|
24 November, 2014

This is the final part of our white paper, and will give you information about the potential problems that can be caused by bad performance management practice, and how you can avoid them. It then aims to give you some advice about how to assess your organisation's specific needs with regards to implementing a process that suits you.

Finally, we will look at the best way to use what you have learned to put together a structured and genuinely useful performance review, and to ensure that the information gained is put to good use.

This section is designed to give you a good overview of the background, aims, considerations and best practice that you need to know when implementing or restructuring your performance management procedures. Whether you are thinking about a different approach to performance management, or simply curious about its history or implementation, this document should be useful.

It is not designed to be an exhaustive source, and the aim is not to tell you exactly how you should be running every aspect of your process. That should vary from organisation to organisation depending on what is best for you.

However, we aim to offer some sound advice, much of which we have learned through years of HR experience.

Performance management covers many areas, so we have split this document into three parts, and divided it into easy to view sections. If you have any questions or comments, feel free to get in touch.
You can read the previous parts of this review here: Part1 or Part 2.
What the critics say; How Performance Management can Fail – What to Avoid
Assessing your needs – how to make sure Performance Management works for you.
How should you organise and conduct your Performance Management review?

1. What the critics say; How Performance Management can Fail – What to Avoid.

Performance Management is a genuinely useful tool in the improvement of business and organisational performance. It has also been found that;

‘Work in Business strategy has given a boost to the prominence of HR in generating sustained competitive advantage.’

However, as with the implementation of any new system, if it is not thought through properly, and the process is not explained clearly to everyone involved, then it may do more harm than good. It is for these reasons that some people deeply distrust Human Resources and Performance Management structures. There are various reasons people are wary of Performance Management structures, but these usually arise because they have seen processes badly implemented.

Some people think of Performance Management as merely the act of ticking boxes. They find it prescriptive, limiting and often unnecessarily time consuming. There are also people who dislike performance appraisals as they see results collected and then left to gather dust in some HR professional’s drawer for eternity. Others can find the process like a form of judgmental scrutiny, and feel that appraisals don’t represent their on-going work, but simply the small parts their boss can remember, or has noticed. Many managers also dread having to give bad feedback as much as employees dread receiving it.

If you do not set up your performance management structure properly and keep everyone involved informed, all of these factors are an understandable concern. However, when set up right, Performance Management can be a positive experience that improves work for both managers and employees, and does not have to take up too much time. In fact, good performance management does quite the opposite. It should save time, give a clear and on-going picture of the entire organisation's issues and achievements. In addition, high staff engagement and the ability to identify training needs should aid internal recruitment and limit staff turnover - which should save you money, too.

‘Systems do not need to involve a lot of paperwork – on the contrary the most effective systems are often the simplest’. (p.1)

If implemented correctly, good Performance Management can lead to a motivated workforce, a great improvement in management control and direct financial gain. It is useful in any area where there is a discrepancy between actual results and realistic desired results.

Once in place, Performance Management can provide great benefits to organisations with very little hassle or disruption. However, proper implementation takes time and care. It also means that everyone involved, especially managers, must be given the correct training in order to ensure Performance Management runs smoothly. There must be a thorough Performance Management procedure and policy in place before assessment begins, and an agreed way of addressing any problems or negative feedback that may arise. The whole point of Performance Management is to involve the individual and for feedback to be be used positively, suggesting solutions to any problem areas in a way that encourages the individual to want to do better and achieve more.

Good Performance Management is a way to achieve shared understandings of company aims and objectives, and to make sure everyone within the company feels involved and valued. It also allows you to align individual goals with the goals of the company.

Many people are sceptical about simply conducting an annual appraisal between manager and employee as they feel this is unrepresentative, and often managers are less aware of what is going on ‘on the shop floor’ than say, a line-manager, or a peer. This is why, depending on the company, you need to carefully consider your performance management needs before you implement a system. But that is the great thing about performance management, it is very flexible, and as long as you take the time to assess your organisational requirements, you can decide on an approach that best fits your needs.

2. Assessing your needs – How to Make sure Performance Management works for you

‘An engaged employee is aware of the business context and works with colleagues to improve performance within the job for the benefit of the organisation’.

There are so many ways you can use performance management to make it fit your organisation and workflow; just as long as you stick to the golden rules we discussed earlier in this paper. The real art is in the way you set it up to begin with. There are a number of things you need to consider.

What are your company’s aims and objectives?
This is important because the goals and targets that you set for your employees work if they are aligned with the overall visions and aims of the company. This ensures you have a whole organisation full of motivated staff working towards a mutually beneficial aim.

What is the list of competencies you will be working around?
The competencies against which you assess your staff must be relevant and fitting to their role. They may differ from position to position, depending on what you want certain individuals or departments to achieve. Some companies have a number of ‘core competencies’ that apply to all roles within the organisation

Communication.
As we mentioned before, this is key. Communication must be clear between all staff, and throughout the entire process. Performance Management only works well if everyone knows what is expected of them and when. Employees must also feel they are able to feedback with comments, problems or changing circumstances at any time. This also applies to the communication of the competencies assigned to each member of staff, which must be placed within a framework.

What do you aim to achieve?
Everyone involved in the process needs to know what they are aiming for. The idea is to achieve a holistic understanding which pervades the entire organisation, and results in everyone working together to achieve a set of goals which contribute to the overall organisational goals.

Growth and Development
Will you be including incentives like training? Performance Management is also used to make the most of the potential you already have in-house. You may wish to draw up a personal development plan for staff which can be reviewed throughout the year as staff aim to achieve their objectives. Establishing what your staff see as their career objectives, and offering things like training in order for them to reach those objectives means they are more likely to remain within, and loyal to, your organisation.

Timing
It is paramount to the success of Performance Management that you plan carefully when appraisals and goal meetings will take place. You must also make sure that these times are adhered to, and understood by all staff. They should not be rushed, or seen as a chore, but seen instead as something positive and useful.

Training
You must ensure that all managers are completely aware of how to conduct appraisals and deal with feedback. They must also be trained in communicating that feedback to individuals in a timely and appropriate manner. It is imperative that they are trained to give negative as well as positive feedback. Many performance management processes fail to make as much impact on company progression as they should as managers tend to gloss over negative feedback in order to avoid an unpleasant altercation. Managers need to be trained to deliver negative feedback in a way that encourages conversation, and the discussion of a solution to the problem. The point of performance management is to solve problems, and address them in a positive way.

Keep a record
This is very important. If you get all the other steps right, but have no record against which to measure progress, the whole process has failed! Keep a record of all goals set, feedback and comments. Also track and report on aims and objectives so you can monitor and discuss them when necessary throughout the year. By keeping an on-going record, you not only have a better idea of what is happening throughout the organisation, but employees can also see what they have achieved, which leads to happy and engaged staff, and consequently, a more productive working environment.

Regular Feedback
Keep up a regular dialogue between line managers and employees throughout the year. This means that you can keep track of how an employee is doing in terms of their objectives and competencies, and also any problems and concerns are apparent as soon as they arise. Nipping a problem in the bud is both time efficient and less costly than addressing and fixing something later. Keeping an open and honest dialogue with your staff also means they are more likely to report any problems they have to you, rather than struggling on alone.

3. How should you organise and conduct your performance management review?

Preparing for an appraisal interview must be properly planned. Mangers need to be prepared before they go in, and employees need adequate time and notice if the process is to be a positive one. It is often useful to have an employee assess themselves, as well as simply being assessed by their managers or peers. This means the process is much more focused and the employee is engaged and active throughout the discussion, rather than feeling as if they are simply being ‘judged’. You must also explain, in context, the feedback they have been given. For example, simply stating a score out of five is not enough. You need to explain why they got that score, and how it is relevant to their role.

The appraisal experience should be a positive one, and the employee should feel comfortable and at ease.

Acas suggests

‘Time should be set aside for the interview. The seating should be comfortable and arranged to create an informal atmosphere’.

Appraisals are designed to use the information gathered to ensure the employee is acknowledged for their strengths, and positive and constructive comments should be given regarding any area in which they may be struggling.

It is best practice to explain clearly the purpose of the interview and to make sure the employee understands the criteria they are being assessed against. The process is aimed at involving the employee, and getting them to feel a sense of ownership concerning their goals and ability to improve and achieve more.

It is best to firstly discuss an employee’s achievements and strengths, and then to ask their views on areas they themselves feel they are struggling, or could improve. For an appraisal to be successful, it is important that the manager knows how to deal with negative comments and doesn’t simply gloss over problem areas. This is why training is so important. Always begin, and end on, a positive note.

Good Performance Management should be an on-going open dialogue, so managers should encourage employees to discuss potential solutions to any problems they are having so achievable goals and targets can be set on which to work throughout the year.

It is best practice to provide a written report of the appraisal meeting, as well as a record of the goals and targets that have been set based on the information gained at appraisal.

Once the first appraisal is over, goals for the year have been set, and agreement has been reached on the monitoring of these goals, it is important not to just count the whole thing as over. In a sense, the appraisal is simply the start.

Keep up the dialogue between managers and staff concerning their progress, and not only will your organisation function better and continually improve, but the whole process will be smoother, better focused and more efficient when appraisals roll round again.